A Promissory Note

question 56

Multiple Choice

A promissory note

• A)is not a formal credit instrument.
• B)may be used to settle an account receivable.
• C)has the party to whom the money is due as the maker.
• D)cannot be factored to another party.

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Definitions:

Competitive Ceiling

Describes the maximum market share or profitability a firm can possibly achieve in a competitive environment.

Financial Structure Leverage

The use of various financial instruments or borrowed capital, like debt, to increase the potential return of an investment.

Long-term Debt

Loans or financial obligations that are due for repayment beyond the next 12 months or the current business cycle.

Finance Assets

Financial assets specifically purchased, created, or held for the purpose of generating income through investment or lending activities.